Home Depot to roll out PayPal in stores nationwide

The hardware chain says nearly all 2,000 of its stores will accept PayPal.

In coming weeks the retailer will equip many of its 2,000 stores with payment terminals that can accept the payment option.

Six weeks after The Home Depot Inc. began testing in-store PayPal acceptance, the national hardware chain has set a schedule to make the payment method an option in nearly all of its 2,000 stores, PayPal says.

The test started in the East Bay area of San Francisco. Broader deployment began this week in Atlanta, Miami and New Orleans. It will spread to Denver, Phoenix and other cities next week. Other areas on the schedule include Cleveland, Washington, D.C., Chicago, and North and South Carolina in coming weeks.

PayPal, a payment services unit of eBay Inc., said in January that Home Depot would expand in-store acceptance nationally. The Home Depot is No. 43 in the Internet Retailer Top 500 Guide.

Consumers inside Home Depot stores can use their PayPal accounts to pay in two ways. One method allows a consumer to pay by entering her phone number as well as a personal identification number into a point-of-sale terminal. The telephone number would have to be previously associated with her PayPal account. A consumer also can swipe a PayPal-issued card tied to her PayPal account.

Long established as an online payment method, PayPal last year trumpeted its plans to move into bricks-and-mortar stores, announcing in October that in-store payment acceptance was next on its agenda.

“It remains to be seen how viable this is,” says Todd Ablowitz, president of payments consulting firm Double Diamond Group. “But it is a big shot in the arm to get such a large retailer to adopt it and roll it out across the chain.”

Other experts agree that this vote of confidence from The Home Depot will serve PayPal well.

“This is an important step for the simple reason that their initial pilot with their first merchant has gone smoothly to the point that both Home Depot and PayPal are moving forward quickly and aggressively with the roll out,” says Rick Oglesby senior analyst at consulting firm Aite Group LLC. “For a PayPal executive, this is exactly what they hoped to see with rapid acceptance from the customer and no major issues on the implementation side.”

A lingering question, however, is if consumers will choose to use PayPal in stores, Ablowitz says. “Does it add something versus swiping with my debit card today? Is it better? Consumers will vote with their actions.”